Direct Deposit

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Quick Summary

Businesses cannot require that employees use direct deposit for paychecks. Authorization for direct deposit is cancelled upon an employee's termination.

Law Review

Cannot Require Direct Deposit

A business cannot require that its employees use direct deposit for the payment of their paychecks.

Automatic Cancellation Upon Termination

When a person's employment is terminated, voluntarily or involuntarily, by law the employee's authorization to directly deposit their paycheck is deemed cancelled.

Final Payment

A terminated employee must be paid their final pay directly by check or by some other means than direct deposit.

More Information is Available with a Premium Subscription

  • Text of pertinent Labor Code statutes

  • Policy reason why direct deposit cannot be mandated

  • Steps to take when an employee being paid by direct deposit leaves or is terminated

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